D.C. Circuit Holds Former Employee Cannot Re-Litigate ERISA Claims Against AARP

In Keister v. American Association of Retired Persons, Inc., No. 22-7002, 2023 WL 4541023 (D.C. Cir. July 14, 2023), the D.C. Circuit Court of Appeals affirmed the district court’s dismissal of Appellant Kim Keister’s ERISA lawsuit against the American Association of Retired Persons (“AARP”) for being barred by claim preclusion.

Keister worked for AARP as a news and policy executive editor from 2004 until 2017 when cognitive deficits following a stroke prevented him from returning to work. AARP sponsored a short- and long-term disability plan insured by Aetna. Aetna approved his short-term disability claim but denied his long-term disability claim. Afterwards, Keister signed a Severance Agreement with AARP which provided the following release of claims:

• In consideration of the promises and benefits contained in this Agreement … you hereby fully and forever waive, discharge, and release AARP … from any and all claims for damages, personal injuries, discrimination, retaliation, reinstatement, or other relief that you may have … based upon your employment, separation, and/or any event or transaction that occurred prior to your signing this Agreement.

The Release further provided:

• It is expressly agreed and understood that this Agreement constitutes a GENERAL RELEASE. You understand that you are releasing claims that you may not know about. This is your knowing and voluntary intent, even though you recognize that someday you might learn that some or all of the facts you currently believe to be true are untrue and even though you might then regret having signed this release. It is further agreed that this consideration shall settle and compromise any claims you have, or may have, whether known or unknown, that existed prior to the date of your signature.

In signing the Severance Agreement, Keister acknowledged that he had not “relied upon any representation or statement, written or oral, not set forth” in the Agreement. After Keister released his claims, Aetna denied his appeal for long-term disability benefits and he filed suit against Aetna and the AARP Benefits Committee, a wholly owned subsidiary of AARP, alleging a wrongful denial of benefits. Keister alleged that AARP representatives knew his benefits had been denied and did not inform him that he would need to appeal to Aetna before signing the release. He also argued that he may have been misled about what he was signing. The AARP Benefits Committee and Aetna separately moved for summary judgment on the basis that he waived his claim for benefits. The court granted their motion, finding that “by signing the separation agreement, Keister waived his right to bring [his] claim for long-term disability benefits, which means that his case cannot proceed as a matter of law,” and that there was “no evidence of a fraudulent misrepresentation.”

Before receiving a final judgment in that lawsuit, he brought a second lawsuit against AARP alleging that AARP: “(1) misrepresented the effect of the Severance Agreement on his pursuit for Long Term Disability Benefits, and (2) intentionally interfered with his attainment of those benefits.” He argued that AARP representatives knew of his medical conditions and his LTD claim, and they breached their fiduciary duties to disclose to him the impact that signing the release would have on his LTD appeal. The district court dismissed the lawsuit under Rule 12(b)(6) because his claims were barred by the doctrines of claim and issue preclusion.

On appeal, the D.C. Circuit found that Keister’s ERISA claim alleging misrepresentation was barred by the doctrine of res judicata. This doctrine prevents repetitious litigation involving the same cause of action or same issues. The court found that the merits of both lawsuits are based on the same cause of action. Keister could have brought the same claim based on the conduct of AARP HR representatives against AARP in the first lawsuit. The court also found that Keister brought the second action against the AARP Benefits Committee’s non-party “privy.” Keister never rebutted the contention that AARP and the AARP Benefits Committee are in privity and has now forfeited that argument. For these reasons, the court affirmed the decision of the district court.